U.S. Investigating Goldman Sachs Bank Over Alleged Greenwashing
Source: CorpWatch. June 13, 2022
Goldman Sachs bank is a top target of a major new investigation by the U.S. Securities & Exchange Commission (SEC) into the “greenwashing” of investment funds to fool investors. They aren’t the only ones: Bank of New York Mellon and Deutsche Bank have also been investigated.
Greenwashing happens when a company makes an environmental claim about something the organization is doing that is intended to promote a sense of environmental impact that doesn’t exist. The green claim is typically about some form of positive effect on the environment. One common form of greenwashing is to include misleading labeling or bury environmentally unsound practices in the fine print. This can include use of terminology such as “eco-friendly” or “sustainable,” which are vague and not verifiable.
Deutsche Bank came under scrutiny when Desiree Fixler, sustainability chief of DWS Group, the bank’s asset-management arm, alleged that the bank was misleading investors. “Last year you presented in your annual report that the majority of your assets under management over €450 billion of assets comply with ESG,” she would recall that she told the bank’s board in February 2021, in an interview with the Financial Times recently. “Unfortunately, I had to inform them that just simply is not true.” Shortly after that, she was fired.
Fixler blew the whistle in August 2021 triggering an SEC investigation. Then in late May this year, 50 government investigators raided DWS’ offices in Frankfurt, Germany to look for evidence on greenwashing. A week later, Asoka Woehrmann, DWS CEO resigned.
Meanwhile the Bank of New York Mellon was slapped with a $1.5 million fine